Plastics and the price of sugar

Today, when we analyze plastic prices, we look at oil and natural gas. But one day will we scan our smartphones for the price of sugar?

That's a question asked by Marc Verbruggen, president and CEO of bioplastics maker NatureWorks LLC.

I recently wrote a short feature on Verbruggen for a special report from our parent company, Crain Communications Inc., on 100 innovators across all the industries covered by Crain magazines, for the 100th anniversary of our company.

One of the business leaders Plastics News chose was Verbruggen. We did that in spite of the well-documented problems that bioplastics companies have had.

My Plastics News colleague Frank Esposito has chronicled those challenges and corporate bankruptcies well and in detail in many articles over the years — including how the record low oil prices and development of shale gas in the United States cause problems for the economics of bioplastics.

But Verbruggen argues that not all bioplastics are created equal. He makes a detailed case in this hour-long presentation at a conference in April.

It's interesting viewing on how possible, or not, it is to make money in the low-carbon economy today. It's the long, 100-year viewpoint from somebody who works where a greener economy has to turn a profit.

For Verbruggen, the key is that his company's biopolymers are price competitive with oil at $30 a barrel. NatureWorks has put a lot of work over the last 20 years into making that happen, and they're more competitive than most other bioplastics, he said.

The key, he said, is that his company can make 1 kilogram of its polylactic acid polymer from 1.25 kilograms of plant sugar.

By comparison, bio-polyethylene needs 3 kg of sugar to make 1 kg of plastic, and bio-PET needs more than 2.5 kg of sugar, according to Verbruggen.

“If I'm PLA, I can still compete against the polystyrenes of the world when oil is $30 to $40 a barrel,” he said.

He talks about how NatureWorks has been EBITDA positive month by month for the last two years, even as oil has gone from $100 a barrel to $30. He admits it's not something he could have said 10 years ago.

For a deeper look at bioplastics, it's interesting viewing.

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